Work detail

Dva eseje o cílování inflace

M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis.

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Abstract:

The thesis consists of two essays on inflation targeting. The first essay examines how do central banks set their inflation targets. Survey of central banks' communication regarding the target is presented, theoretical model is developed and finally empirical analysis is conducted on a panel of inflation targeting countries. This pioneering analysis of the topic leads us to conclusion that inflation targets are influenced by more variables than central banks admit. In addition to past and foreign inflation, inflation variability and GDP growth we find significant impact of central bank credibility and other institutional factors. The short second essay surveys literature assessing performance of inflation targeting and outlines perspectives of inflation targeting as a monetary policy framework. The conclusion is that if inflation targeting central banks stick to their best practice in transparency and communication and remain open to innovations, inflation targeting will have a good chance to score well even in the periods of turmoil.